Instagram denies report of plunge in users following policy flap

A chart by AppData seems to show Instagram lost nearly 4 million users in… (AppData )

Instagram says it continues to see daily user growth despite a flap over its terms of service that prompted threats by some users to drop the service.

The Facebook-owned social network was responding to a New York Post report that said the popular photo sharing app had lost a quarter of its daily users as a result of Instagram's controversial move to change its terms of service.

The change would have allowed the social network to let companies pay to place users' photos in advertisements that would run within the Instagram app. Instagram withdrew the change after protests from Instagram users, but some users still vowed to drop the service.

The New York Post, citing information from AppData, a metrics website, said that despite the reversal, Instagram lost 4 million daily users. That led Facebook's stock to fall nearly 3% within opening minutes of Friday trading.

But Instagram says the data provided by AppData are simply not true.

"This data is inaccurate," an Instagram spokeswoman told The Times. "We continue to see strong and steady growth in both registered and active users of Instagram."

Instagram may have a point, considering there may be a few holes in AppData's information.

For starters, the peak of the Instagram revolt came on Dec. 18 when the photo sharing app withdrew its controversial terms of service. But AppData's figures showed Instagram gained users the next day.

AppData's figures show the big drop in users actually happening days later, on Christmas Day.

Also, AppData's figures only account for users who log into Instagram using their Facebook account. That doesn't account for users who log in using just their email addresses.